Standard Life: Pension contributions could grow after PBR announcement

www.moneynews.co.uk > Pensions > Standard Life: Pension contributions could grow after PBR announcement

Standard Life: Pension contributions could grow after PBR announcement

Wed 26th Nov 2008

Standard Life has said that the announcement of an increase in National Insurance (NI) in yesterday's pre-Budget report (PBR) may mean that more people choose employer pension contributions over higher salaries.

The NI increase means that those earning above £44,000 per annum will pay 11 per cent on a much larger chunk of their salary.

These increased NI payments could be avoided if workers opted to sacrifice part of their salary and have their employers pay pension contributions instead.

John Lawson, head of pensions policy at Standard Life, said: "This could save the employee up to 11 per cent of NI and the employer 12.8 per cent of NI, in addition to the normal corporation tax relief on employer pension contributions."

He suggested that the savings made this way could then be used to make further contributions to pension funds.

This news comes at a time when many pension funds are feeling the pinch.

A recent survey by AXA revealed that as people cut their contributions because of the credit crunch, pension funds stood to lose up to £35 billion.

Click here for more pension news

Related News : Pensions
	Over-55s don't believe in paying for care, reveals Aviva
	East Midlands comes top in pension contributions
	Corporate pensions provider issues advice for businesses
	One third of workers have no pension, claims Prudential
	More than a third of Brits fail to reassess pension risk, claim experts
	Women protest at No 10 over proposed pension reforms
	Retirement age 'to be brought forward by ten years'
	Interest rates held at 0.5 per cent by Bank of England
	Pension contributions fall in recession, ONS reveals
	Equity release for retirement 'might not suite every household'